Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Airport Advertising topic
No spam. Unsubscribe anytime.
Supervisors delay vote on SFO advertising amendment after budget analyst flags guarantee language
Summary
The Budget & Finance Committee continued for four weeks a proposed amendment to Clear Channels advertising lease at San Francisco International Airport after the budget analyst warned the minimum annual guarantee could lock the city into an unchanging payment level despite Clear Channels higher revenue projections.
The Budget and Finance Committee on Wednesday put off action for four weeks on an amendment to Clear Channels advertising lease at San Francisco International Airport after the committees budget analyst raised concerns about how the minimum annual guarantee is written.
Mister Rose, the committees budget analyst, told supervisors the amendment incorporates $1.8 million in capital improvements into the lease but uses a minimum annual guarantee formula that departs from prior airport leases. "What you have before you is that you would receive 85% of the prior year's gross receipts or the minimum annual guarantee of the prior year if that is more than 85% of the gross receipts," Rose warned, saying that structure could leave the city receiving the same $6.3 million minimum for multiple years if Clear Channel's percentage rent projections do not materialize.
Kathy Widener of San Francisco International Airport said the lease is different from a food or airline lease because it covers multiple advertising media and that the airport requested Clear Channel include capital costs for new customer amenities. "This is a different lease than a food and beverage lease or an airline lease for space," Widener said, adding that Clear Channel will pay the airport the greater of the percentage formula or the minimum guarantee. She offered to ask concession staff and Clear Channel to revisit the exact minimum-guarantee language.
Supervisor McGoldrick, who raised broader policy objections to expanding advertising at the airport, told the committee he is philosophically opposed to increasing commercial signage and questioned whether more advertising should be used to fund modest customer amenities. After discussion, a supervisor moved to continue the item for four weeks to allow staff to seek revised language from Clear Channel and return to the committee; that motion carried without objection. The matter is continued to May 28.
The committee record shows the amendment adds roughly 300 additional advertising placements of varying sizes, driven in part by the inclusion of workstations and kiosks intended for passenger use. Airport staff said the additional placements were part of the tradeoff to amortize the requested $1.8 million in capital work.
Next steps: Airport and concession staff will be asked to return with revised guarantee language or other clarifications for the committee at the scheduled continuation.
